JUNEAU, Alaska (AP) -- Alaska's governor on Friday announced a new way forward on a long-hoped-for natural gas pipeline.

In a major policy speech in Anchorage, Sean Parnell said the state and Canadian pipeline builder TransCanada Corp. have agreed to terminate their involvement under the Alaska Gasline Inducement Act. He made clear, however, that TransCanada would remain a partner in the project, just under new terms.

Parnell said he would seek legislative approval for state participation in a new commercial agreement with TransCanada and the North Slope's three major players, Exxon Mobil Corp., BP PLC and ConocoPhillips. He said he expected an agreement with a set of terms to be signed soon.

The governor said he also would propose legislation that would allow the state to enter into shipping agreements to move and sell gas and allow for certain leases to pay production taxes with gas.

"The bottom line: We will have an investment-quality project when that's complete," he said.

Alaskans have long seen as a gas line as a way to create jobs, provide energy for residents and shore up revenues as oil production declines. There have been fits and starts over the years, but Parnell and other state officials believe the current project has momentum.

While Parnell in the past argued for continuing to pursue a project under terms of the 2007 Alaska Gasline Inducement Act, even as some state legislators saw it as a dead end, he came to no longer view it as the best way forward. He said the law was designed for one project developer, but the project initially envisioned -- a pipeline that would run from the prodigious North Slope into Canada to serve North America markets -- has changed, and so have the players.

In 2008, TransCanada won an exclusive license to pursue a project, with a promise of up to $500 million in reimbursable costs from the state. Exxon Mobil later joined TransCanada's effort. ConocoPhillips and BP, which opposed provisions of the law, pursued a rival line of their own before abandoning it in 2011.

The companies, at Parnell's urging, united in the last few years behind a liquefied natural gas project capable of overseas exports. The proposed line would run from the slope to south-central Alaska and could cost from $45 billion to more than $65 billion, according to company estimates. The companies haven't committed to building and have repeatedly said they needed competitive, predictable and durable terms on oil and gas taxes and royalties.